A £3,000 loss for every UK household

The UK Government is sitting on losses of almost £11bn from its rescue of Royal Bank of Scotland and Lloyds Banking Group and there will be no quick exit for the taxpayer, the body that manages the stakes warned today.

UK Financial Investments (UKFI) said in its annual report that its loss on the two stakes - 70pc of RBS and 43pc of Lloyds Banking Group - had reached £10.9bn at the end of June.

The losses, which are not yet realised, have been wracked up since Gordon Brown was forced to inject billions into the troubled lenders in October.

The investment, which amounts to more than £3,000 that each UK household, will not be quickly disposed of. The recession is continuing to hit both banks hard.